For newbie and seasoned traders alike, {the thought of} playing the Asian {currency markets} {may seem} exotic. It’s {not} {not the same as} playing the U.S. {currency markets} or the European {currency markets} – {nevertheless, you} need to {learn} whichever market {you select}.
{With that said}, it’s {my estimation} {that a lot of} successful traders, like my top students, are specialists. What do {After all}? They {concentrate on} one instrument, like {very cheap stocks}, forex, or options. {Plus they} choose one market, {just like the} domestic {currency markets}, the European {currency markets}, or the Asian {currency markets}.
Even the big boys – the banks {making use of their} fingers {in lots of} slices of {the planet} financial pie – have dedicated teams for different markets.
{For most} traders, the domestic market {will do}, {however the} Asian markets can present {a chance}. In this age of multinational corporations (MNC), it’s {smart to} understand markets in other regions.
{You may} even {opt to} jump in and trade …
Table of Contents
{WHAT’S} the Asian {CURRENCY MARKETS}?
Asia’s securities markets date back over 150 years – and their stock exchanges, nearly {for as long}.
Post-WWII industrial expansion, global trade, and population booms contributed to a surge in the Asian markets. {Recently} the tech boom {is really a} primary driver of fast-growing Asian economies.
{Before you begin} {searching for} great Chinese {very cheap stocks} to trade, {you need to know} that the ‘Asian stock market’ {is in fact} many markets. {For instance}, Japan, China, Hong Kong, Taiwan, India, Malaysia, South Korea, and Singapore all have {their very own} exchanges. {You can find} 49 countries (nation states) in Asia.
That’s {lots of|plenty of} trading opportunities …
The three largest Asian exchanges {will be the} Tokyo {STOCK MARKET}, the Shanghai {STOCK MARKET}, and the Hong Kong {STOCK MARKET}. Combined, {they will have} a trading {level of} nearly $8 trillion {each year} (2015). For comparison, the NYSE had a trading {level of} $20.61 trillion in 2011.
What does this mean {for you personally} as a trader? Considering {all of the} Asian exchanges and {a large number of} listed securities, it’s {an enormous} market …
{Could it be} also {an enormous} opportunity?
{Great things about} {Buying} the Asian {CURRENCY MARKETS}
Asian economies are booming. Although {this season} has seen some big drops in major Asian stock markets, Asian economies {remain} booming {in comparison to} much of {the planet}.
Historically, Asia {includes a} strong record for long economic booms. {All together}, Asia enjoys steady, fast-paced growth {for quite some time}.
{At the very least} seven {Parts of asia} benefit from {a lot more than} 50 years of gross domestic product (GDP) growth above 3.5% annually. And 11 {Parts of asia} enjoy GDP growth {greater than} 5% {going back} {twenty years}.
{In comparison}, the U.S. GDP growth rate fluctuates between roughly .5% and 3.8% annually {because the} 2008 {financial meltdown} ended.
{A few of the} stronger Asian economies have multiple years of 6%+ GDP growth! China, {specifically}, {is rolling out} into {among the} world’s economic growth powerhouses.
Asian markets are recovering? {This past year} Asian {currency markets} news {centered on} recovery. But during 2018, {as the} U.S. markets are roughly even for {the entire year} ({during} writing), around two-thirds of Asian markets are down. The Shanghai exchange is {completely} bear territory – it’s over 20% down on {the entire year}.
I {understand this} two ways:
- As a trader, I look at market sentiment {to comprehend} {what types of} plays {can be found}. {Nonetheless it} doesn’t change {the truth that} I open and close positions in {a comparatively} {short time} of time. {You may make} money trading {very cheap stocks} {no real matter what} {the entire} market {does}.
- When an economy {keeps growing} but the {currency markets} is dropping, {there could be} undervalued stocks {to get}. It’s the classic buy-low, sell-high strategy that turned Warren Buffet {right into a} billionaire.
{You can find} Chinese {very cheap stocks}. {Back again to} my {method of} doing things: trading. It’s {vital that you} note {you can find} penny stocks {far away}. {It is possible to} trade {very cheap stocks} in China, Japan, India, the Philippines – {just about|virtually} anywhere there’s a {currency markets}.
{Just like} day trading {within} the U.S., {you will need} knowledge. {Keep yourself well-informed}. This guide {to locating} penny stocks {can help you}. {Be prepared to} overcome barriers {before you} trade. {In case you have|For those who have|When you have|Should you have} any doubts {in what} you’re doing, {avoid}.
{A chance to} diversify. {Buying} Asian markets {could be a} {solution to} diversify your portfolio. Again, {I believe} {you have to be|you should be} ready before you leap {involved with it}. {Invest some time}. {Research your facts}. I {concentrate on} day trading {very cheap stocks} {within} the U.S. for {grounds} – it’s what {I understand}.
{Another} time zone. {This is often a} huge opportunity {if you would like} or {have to} trade at odd hours. {For instance}, say {you would like to|you need to|you wish to} trade after your regular work hours. The Hong Kong {currency markets} opens at 8:30 p.m. Eastern Time.
A word of caution: {Although it} might seem {just like a|such as a} great idea {to start out} trading different markets at different hours …
… {it is a} degenerate gambler mentality!
{You will need} time for research. {You will need} {time and energy to} step {from} the screen and do {things such as} eat and exercise. {You will need} {time and energy to} network with other traders (networking is {among} my ace student Dominic’s 6 trading tips). Set your hours and trade. Win or lose, {leave} {by the end} of {your day}.
With risk comes reward. There {it really is}, {basically}. The Asian markets present {a fresh} layer of risk and, consequently, {a fresh} layer of reward. Before you jump {in to the} Asian market, review my Trader Checklist. Watch it {more often than once} for best results.
Differences of {Buying} {america} vs. the Asian {CURRENCY MARKETS}
Beware … different countries have different rules. If you’re {likely to} trade these stocks, {research your options}! Also, you’ll {have to} {look for a} broker {which allows} {one to} trade the Asian stock markets.
{For a long time}, playing Asian penny stock markets was {nearly the same as} the wild west – few regulations {and lots of} speculators. Imagine how ripe these markets are for classic pump-and-dump scams. {Even more} reason {to accomplish} {your quest}.
{Previously|During the past} {couple of years} there’s been talk of increasing regulations on {very cheap stocks} in Asia. {This consists of} the Hong Kong and mainland Chinese stock markets.
Foreign markets are sympathetic to the U.S. {currency markets} now {as part of your}. But it’s {vital that you} {notice that} regional markets don’t always trend with {all of those other} world. Economic outlook, trade regulations, {along with other} events can influence the Asian financial markets.
One {huge difference}: You won’t {have the ability to} use StocksToTrade as your trading platform or stock screener for the Asian {currency markets}. It’s not {setup|create} for that now. I mention this because I helped develop the platform and there’s {nothing beats} it {on the market}. I {contemplate it} {a definite} advantage for trading.
What Time Does the Asian Market Open?
As {you can find} {a wide variety of} Asian stock exchanges, I won’t list {all of the} times. This handy world {currency markets} map {teaches you} what markets are open {at any moment}. {If you need a} table format, {have a look at} this {set of} world {stock market} trading hours.
{Generally}: Asian markets {commence to} open for {the very next day} just hours {once they} close in the U.S. And {in the event you} haven’t peeped a map in {some time}, {understand that} Asia is huge, with {a number of different} time zones. {You should know} the relationship {between your} time zone {of one’s} location and {enough time} zone where {you intend to} trade.
Influence of the Chinese {CURRENCY MARKETS} on Asian Markets
China {includes a} huge regional influence – {also it} extends {directly into} the stock markets. In {quite similar} way that U.S. markets have {a solid} worldwide influence, the Chinese {currency markets} influences other Asian markets. {Once the} Chinese market is down, other regional markets often follow suit. {Exactly the same} {applies to} when it’s up.
{How exactly to} {Spend money on} the Asian {CURRENCY MARKETS}
1. {Need for} Fundamental Analysis
For investing – long-term style – I can’t emphasize {the significance} of fundamental analysis enough. {You might} know {this is simply not} my main strategy because I trade {very cheap stocks}. However, {it is a} valid {method of} determining the long-term value and opportunity of {running a} company’s shares.
I don’t completely ignore fundamentals. Without some basic understanding, like what {the business} sells, {you may} miss {a significant} news catalyst. {You should know} what’s news and what’s not. That’s difficult {in the event that you} don’t {involve some} idea of {the basics}.
2. Follow Asian {CURRENCY MARKETS} News Catalysts
{Probably the most} {considerations} I teach to my Trading Challenge students {would be to} recognize news catalysts. Whether you’re trading weed stocks in the U.S. or micro-computer component stocks in Asia, news catalysts {tend to be} the drivers of big price action.
3. {Work with a} Stock Screener
It doesn’t matter where you’re trading, {you should employ} a stock screener. The trading world is digital and {overly busy}. A stock screener {enables you to} sift through {a large number of} stocks {to get} only {the ones that} meet specified criteria.
4. {USUALLY DO NOT} Trust Stock Promoters
Asian stocks, biotech stocks, weed stocks – it doesn’t matter what stock {has been} promoted …
… stock promoters {earn money} by pumping stocks. That’s it.
Recently {an extremely} well-known financial newsletter publisher in the U.S. ran a ‘single stock retirement plan’ promo. The hyped stock {is really a} well-known Asian computer component manufacturer. They make parts for {several} ‘household name’ tech company.
The hyped company is massive and profitable. It employs {greater than a} million people worldwide. The newsletter that the ‘single stock retirement plan’ {useful for} promotion {is a great|is an excellent} newsletter. {However the} hype {round the} stock was {a whole} pump move.
Ironically, it’s {not} traded on U.S. markets yet. But {in the event that you} go look at price action on the stock (hint {for you personally} sleuths: it trades on the Taiwan exchange) it’s pretty clear the promotion got some blood pumping and the stock price {raised} … briefly.
{This is actually the} game of stock promoters. They {earn money} by pumping stocks. {Be skeptical}.
5. Create an Asian Stock Watchlist
{Among the} first things I teach all my Trading Challenge students {would be to} {develop a} watchlist. Update it daily. Start learning patterns and price action by watching. {In the event that you} haven’t {enrolled in} my weekly watchlist, {do it}. It’s {a terrific way to|the best way to} start. (It’s U.S. based, however. You’re {by yourself} for creating an Asian stock watchlist.)
{Exactly the same} {pertains to} the Asian {currency markets} – if you’re {likely to} trade, {you will need a} watchlist. It’s {probably the most} basic {elements of} {your quest}. If you’re {seriously interested in} trading the Asian markets, start your Asian stock watchlist today.
6. {Focus on} Asian Stock Patterns
{I believe} you’ll find {most of the} same {currency markets} patterns in the U.S. and Asian markets. Most patterns we trade were first identified and {seen as a} Japanese rice traders.
There’s {an excellent} book {about any of it} called “Japanese Candlestick Charting Techniques” by Steve Nisen. It’s {an excellent} book for in-depth study of candlestick charts {whether or not} {you choose to} trade the Asian markets or not.
{HOW WILL YOU} Explore Asian Market Opportunities?
Read Up
{In lots of ways}, a decision {to purchase} the Asian {currency markets} {is really a} decision {to obtain} {back again to} basics. That’s because {you can find} enough differences that you’ll {have to} spend some serious time studying.
As always, you can’t cheat success. If you’re {likely to} {spend money on} or trade the Asian markets, {still do it}. Get educated.
{LOOK FOR} Other Resources
{There are many} books {concerning the} Asian markets available. Also, {nearly every} financial website {comes with an} entire section {specialized in} the Asian {currency markets}. It’s an ever-shifting landscape. {You have to|You should} {stick to} top of what’s going on in the economies and markets where {you intend} to trade.
{LOOK FOR} a Money Manager
Sometimes I’m hard on money managers {since they} {have a tendency to} give boring advice about money. It’s {not the same as} what {I wish to} teach you, {that is} trading (it’s {much more} rewarding, {for me}).
{The truth is}, when you’re {discussing} foreign markets {you must understand} {all of the} moving parts.
{You need to} deal with {forex}, sourcing {a proper} broker, different regulations – the list {continues on}. {An excellent} money manager can {help you} in these areas. {I would recommend} contacting a money manager with expertise in the Asian {currency markets}. Consider it {section of} your investment.
If you’re considering {buying} an Asian company {as you} believe in {the business}, then {it could be} {smart to} …
Investigate ADRs
American Depository Receipts (ADRs) {certainly are a} {method for} foreign companies to list shares on U.S. exchanges. Imagine trading shares on an Asian exchange without understanding {all of the} regulations. Add {forex}, {also it} gets {a lot more} complicated.
{Once you} trade ADRs, orders are executed on U.S. exchanges in U.S. dollars. How? U.S. {financial institutions} buy large blocks of shares in foreign stocks, then offer them as ADRs. {For this reason|That is why} you can {choose} company {such as for example} Chinese e-commerce giant Alibaba (BABA) on {the brand new} York {STOCK MARKET}.
I find ADRs interesting {since they} {can be found in} different flavors – {plus some} flavors are traded {over-the-counter} (OTC) {rather than} {among the} big exchanges. For {a cent} stock trader, this hits {just a little} {nearer to} home.
{Do you know the} Risks of {Buying} the Asian {CURRENCY MARKETS}?
Like {any kind of} trading or investing, the Asian {currency markets} has its risks. The economies of {Parts of asia} are mostly considered ‘emerging’ economies. {That is} {among the} reasons they’re growing so rapidly.
But {that may} also mean {lots of|plenty of} volatility in the Asian markets. While I embrace volatility, {it’s rather a} little unnerving. {Prepare yourself}.
Other risks include political uncertainty ({in a few} {Parts of asia}), changing regulations, and fluctuations in {forex}.
{You can find} similar risks {inside our} own domestic markets … It’s {that} we’re more {acquainted with} what’s going on. We hear {about any of it} in {the news headlines}.
Which brings me {to the}: {Focus on} Asian {currency markets} news if you’re {likely to} trade in those markets.
Master Your Trading Skills With {PROFESSIONAL HELP}
{Did you know} having {a specialist} mentor can {boost your} {likelihood of} success? {That is} true in {nearly every} field of endeavor. {However when} it {involves} trading {it really is} – {for me} – essential. {It’ll} save you {lots of time|considerable time} and probably {lots of money}.
Where {can you} get quality {professional help}? {I would recommend} you {join} {to} Profit.ly {and purchase} {among} my courses. Or, if you’re ready, {make an application for} my Trading Challenge.
{UNDERNEATH} Line
The Asian {currency markets} presents another {chance for|chance of} you as a trader.
Whether it’s right {for you personally} depends on {lots of|plenty of} factors. {Anything you} choose, don’t overextend yourself by {attempting to} trade {a number of different} markets at {differing times}.
{Select a} market to trade and master it.
{Are you currently} a trader? {Perhaps you have} explored the Asian markets? {Perhaps you} already trade in Asia … {i want to} know! Our trading community {keeps growing}, and {I wish to} hear about your experiences.